Internet banking startup Firste will challenge high street banks by introducing a 'virtual infrastructure' that claims only 25 per cent of normal IT running costs.
Firste, which is awaiting European regulatory approval, owns just 20 Sun Microsystems servers for Web delivery and its back office, and has outsourced the management of this to IBM.
Shane Colclough, Firste chief technology officer, said this meant the bank could concentrate on its core banking business, because it didn't have to build or support its own IT infrastructure.
Colclough added that as a green field site, Firste, with its online experience, could begin Internet banking immediately without having to re-engineer a complex legacy back office infrastructure, as some banks have been forced to do.
According to a recent Cap Gemini survey of 200 European institutions, the established high street banks are expected to increase spending on branch back office and legacy system integration, despite the emergence of Internet banking.
This is because of the need to integrate legacy back office systems to make services such as online payments into a bank account possible via the Internet, said Cap Gemini business development director Michael Fordham.
Colclough said: "Our main advantage is our green field status. We will be able to deliver a banking system dedicated to serving customers via electronic access."
He criticised the reluctance of UK banks to embrace Internet banking: "The UK is fairly backward in respect of ebanking," said Colclough. "A lot of banks see it as an additional cost. They are looking at it the wrong way."
For further stories see 15 April issue of Computing
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